The Co-operative Alliance of Kenya has called on Parliament to amend sections of the proposed Sacco Societies (Amendment) Bill, arguing that some provisions could weaken the cooperative identity of SACCOs and impose additional financial strain on member institutions.
The Alliance submitted its views to the National Assembly’s Departmental Committee on Trade, Industry and Cooperatives during a session chaired by Bernard Masaka. The meeting brought together cooperative sector leaders, government officials, and technical experts to deliberate on the proposed reforms.
Among the key concerns raised by the Alliance was the inclusion of the term “Credit Union” in the bill. According to the CAK, the label does not accurately reflect the Kenyan SACCO model, which integrates both savings and credit services, unlike international credit union systems that focus mainly on lending.
The Alliance also proposed that the planned Stabilisation Protection Scheme be managed by the Sacco Societies Regulatory Authority rather than creating structures that could increase the financial burden on SACCO members. It suggested that the scheme should instead be financed through industry penalties and private investment capital.
On deposit protection, the CAK opposed proposals linking SACCOs to the Kenya Deposit Insurance Corporation, maintaining that SACCOs should operate under a separate guarantee framework distinct from commercial banks. The Alliance argued that integrating SACCOs into the banking deposit insurance system would compromise the cooperative principles of independence, self-governance, and member ownership.
Speaking during the session, Solomon Atsiaya cautioned lawmakers against adopting banking or microfinance regulatory approaches for SACCOs, saying the cooperative model has already demonstrated resilience and success under its current structure.
He emphasized the need to strengthen the role of the Sacco Societies Regulatory Authority in supervising SACCOs instead of introducing frameworks modeled on other financial sectors.
Committee Vice Chairperson Marianne Kitany urged the government to harmonize its legislative proposals with recommendations already submitted by the Committee of Experts, warning that contradictory positions could slow down the legislative process or weaken the effectiveness of the bill. Parliament is expected to conduct additional consultations to reconcile the government’s proposals, expert recommendations, and the concerns raised by the cooperative sector. Key unresolved matters include funding mechanisms for the Stabilisation Protection Scheme, definitions of eligible institutions, and compliance requirements that could particularly affect smaller community SACCOs.
